Tourmaline Oil files preliminary prospectus for $252.5M Topaz Energy IPO

Tourmaline Oil files preliminary prospectus for $252.5M Topaz Energy IPO

CALGARY — Shares in Tourmaline Oil Corp. tracked lower Friday as its subsidiary, Topaz Energy Corp., announced it has filed a preliminary prospectus to raise $252.5 million through an initial public offering.

The offering — which will test the market’s appetite for new energy investments — is to generate $217.5 million from sales of treasury shares, along with $35 million from a secondary offering of shares held by majority owner Tourmaline. The shares to be priced at between $13 and $15 each.

Final pricing and closing is expected in the latter part of October.

In Toronto, Tourmaline stock fell by as much as 55 cents or 3.2 per cent to $16.58 on Friday afternoon. The larger energy sector is down by 55 per cent so far this year but Tourmaline has actually gained from its close on Dec. 31 of $15.22.

The energy industry has been out of favour on stock markets for years for sound fundamental reasons and there’s no reason to expect that to change soon, said Allan Small, senior investment adviser at HollisWealth in Toronto.

“I wouldn’t be interested in the slightest (in the IPO) …I just think there is no future,” he said in an interview Friday, adding the timing of IPO is unfortunate as the COVID-19 pandemic drags on and oil prices stall after staging a recovery through the summer.

“I think oil companies are doing what they have to to survive and thrive in some way, whether that’s spinning off assets, whether that’s mergers, whether that’s changing your business.”

The market’s doubt about the ability of the energy industry to regain its former strength is reinforced by the recent move by oil giant BP Plc to reduce fossil fuel production and change itself into a clean energy giant, he said.

Calgary-based Topaz was created by Tourmaline in November to hold royalty and energy infrastructure assets that it felt were not being recognized by the market in its share price.

Topaz owns royalty interests on about 920,000 hectares of developed and undeveloped oil and gas lands, as well as non-operated stakes in four natural gas processing plants.

The offering is being made through a syndicate of 14 underwriters co-led by Peters & Co. Ltd. and Scotiabank.

“Topaz’s objective is to generate free cash flow growth through indirect oil and gas and infrastructure investment at a relatively low-risk and low cost to the company,” says the preliminary prospectus.

“Topaz seeks to achieve this objective by selectively pursuing strategic business development opportunities with high-quality partners that are accretive to Topaz.”

This report by The Canadian Press was first published Sept. 25, 2020.

Companies in this story: (TSX:TOU)

Dan Healing, The Canadian Press

energy sector

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer Mayor Tara Veer and Roland Gaviola, Iglesia ni Cristo Church of Christ district minister in the Calgary region, stand in front of the 300-plus boxes of donated food at the Red Deer Food Bank Saturday afternoon. (Photo by Sean McIntosh/Advocate staff)
Red Deer Food Bank receives big donation from local church

More than 300 boxes of food were donated Saturday

Jason Aquino has been adding to his front lawn Halloween display for the past five years. “I wanted to do it big this year, because even in the pandemic, we can still enjoy Halloween,” says the Red Deer father.
Halloween spookiness rises to new level

Rare astronomical occurrence caps off a strange holiday

Alberta Health Services' central zone jumped from 162 active COVID-19 cases to 178 on Friday. Five additional deaths were reported provincewide, bringing the toll to 323. THE CANADIAN PRESS/Graham Hughes
622 new COVID-19 cases set another daily high Friday

Province confirmed 622 additional cases Friday

Advocate file photo
Man awaiting murder trial facing two new trials for breaching release conditions

Quentin Strawberry going to trial in March in connection with 2019 murder

Ecole La Prairie students and teachers dressed up in Halloween costumes and paraded by Barrett Kiwanis Place, while waving at the building’s residents in Red Deer on Friday. (Photo by Sean McIntosh/Advocate staff)
Ecole La Prairie students parade in Halloween costumes for Red Deer seniors

Dozens of Red Deer students put on their Halloween costumes to spread… Continue reading

Over the years, Janice Blackie-Goodine’s home in Summerland has featured elaborate Halloween displays and decorations each October. (File photo)
QUIZ: How much do you really know about Halloween?

Oct. 31 is a night of frights. How much do you know about Halloween customs and traditions?

A costumed trick or treater turns after being given candy during Halloween celebrations in Toronto, on Tuesday, October 31, 2017. Families across the country have assembled their costumes and stockpiled their candy to celebrate a Halloween that is -- hopefully -- unlike any other. Public health restrictions to protect against COVID-19 vary depending on the region, but most officials have given trick-or-treating the go-ahead.THE CANADIAN PRESS/Chris Young
Families prepare for pandemic-era Halloween with public health restrictions in place

TORONTO — Canadians may be putting the final touches on their costumes… Continue reading

Indigenous fishermen adjust lines on their boat in Saulnierville, N.S. on Wednesday, Oct. 21, 2020. THE CANADIAN PRESS /Andrew Vaughan
N.S. Mi’kmaq chiefs demand stop of alleged federal plans to seize lobster traps

HALIFAX — The Assembly of Nova Scotia Mi’kmaq Chiefs is alleging the… Continue reading

Grand Chief Arlen Dumas of the Assembly of Manitoba Chiefs speaks in Ottawa on Thursday, December 7, 2017. Dumas says he's concerned about the growing number of COVID-19 cases First Nation communities. THE CANADIAN PRESS/Fred Chartrand
The family of Allan Landrie, shown in a family handout photo, is disappointed the Saskatchewan Coroners Service isn’t considering an inquest into the 72-year-old's hospital death. Landrie's death in September 2019 was ruled a suicide. More than three days had passed before his body was discovered locked in a hospital bathroom in Saskatoon. THE CANADIAN PRESS/HO
‘He was so sick,’ says daughter of Saskatoon man who committed suicide in hospital

Allan Landrie’s body was discovered three days after his death

Supporters listen as Democratic presidential candidate former Vice President Joe Biden speaks at a rally at the Iowa State Fairgrounds in Des Moines, Iowa, Friday, Oct. 30, 2020. (AP Photo/Andrew Harnik)
Obama: Trump failed to take pandemic, presidency seriously

FLINT, Mich. — Calling Joe Biden his “brother,” Barack Obama on Saturday… Continue reading

ll
Imagining the origins of Halloween

Long ago and far away, a small assemblage of English people gathered… Continue reading

Red Deer College president Peter Nunoda. (Photo by contributed)
Peter Nunoda: Winter term will be busier on RDC campus

In my column last month, I shared details about Red Deer College’s… Continue reading

FILE - In this Jan. 23, 1987 file photo, actor Sean Connery holds a rose in his hand as he talks about his new movie "The Name of the Rose" at a news conference in London. Scottish actor Sean Connery, considered by many to have been the best James Bond, has died aged 90, according to an announcement from his family. (AP Photo/Gerald Penny, File)
Actor Sean Connery, the ‘original’ James Bond, dies at 90

He died peacefully in his sleep overnight in the Bahamas

Most Read